Mortgage relaxation rates are now decidedly lower than a year ago, and home shoppers are buying in, but most are wealthier consumers purchasing more up-market homes.
Total mortgage application volume rose 2.3 percent last week from the previous week, according to the Mortgage Bankers Union’s seasonally adjusted index. Volume was essentially flat compared with the same week one year ago.
Falling measures were likely behind a sizable jump in loan applications to purchase a home. They rose 4 percent for the week and were 2 percent extraordinary than a year ago. Buyers last year were up against high home prices and rising rates, press affordability down to the lowest level in a decade. That, combined with a severe scarcity of entry-level homes for on the block, put the housing market in a deep freeze. Rates, however, began falling at the end of the year, helping affordability, but apparently only for some.
“Purchase applications have now increased year over year for four weeks, which signals in good demand entering the busy spring buying season,” said Joel Kan, the MBA’s associate vice president of economic and effort forecasting. “However, the pickup in the average loan size continues, with the average balance reaching another write down high. With more inventory in their price range compared to first-time buyers, move-up and higher-end customers continue to have strong success finding a home.”
The average loan size jumped to a record $326,000, luxuriously above the nation’s median home value, which the National Association of Realtors said stood at $247,500 in January.
The common contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) declined to 4.64 percent last week from 4.67 percent the week before, with points increasing to 0.47 from 0.44 (incorporating the origination fee) for loans with a 20 percent down payment. The rate was at 4.77 percent a year ago.
Applications to refinance a effectively loan decreased 0.2 percent for the week and were 4.4 percent lower than a year ago. Rates may be farther down than last year, but so many people have already refinanced at even lower rates, in the 3 percent file, that there is a limited pool of potential borrowers who could still benefit.